European Commission to investigate joint venture for mobile payments

Mobile operator Three says venture raises "serious competition concerns"

The European Commission (EC) has said it will investigate a mobile payments joint-venture between Vodafone, Telefonica and Everything Everywhere.

The venture, entitled Project Oscar, was set up by three of the UK's largest mobile operators last year, but concerns have been raised under the EC's competition rules.

According to the EC, other mobile operators may struggle to get a foothold in the mobile payments, advertising and related data analytics markets as the joint venture may have "very high market shares".

In a statement, Joaquín Almunia, the Commission's vice president of competition policy, said: "The Commission is in favour of any initiative that will develop the promising mobile commerce sector in Europe and bring new and innovative payment and interactive advertising experience to consumers.

"At the same time, we need to make sure that competing services can keep emerging in this market, so that incentives to innovate remain and customers get the best mobile commerce services at the best cost," he added.

UK mobile operator Three, which is not involved in the venture, told Computing that it is encouraged by the EC's decision to complete an in-depth investigation.

"The proposed joint venture raises serious competition concerns. We support the Commission's finding that this joint venture could block future initiatives in the area of mobile commerce services," it said in a statement.

"We are pleased that it has moved to launch an in-depth investigation into the scope, activities and impact on consumers of this venture, as well as the future development of the market for these services."

Vodafone, Telefonica and Everything Everywhere have responded to the EC's announcement, and suggested that they remain committed to the initial joint venture proposals.

"The EC decision to enter into a second phase of investigation follows constructive discussions with the EC about the purpose and scope of the joint venture. The discussions have been positive and the shareholders in the proposed joint venture remain focused and determined to progress with the project," they said in a joint statement.

The joint venture agreement would provide a single point of contact for advertisers, marketing partners, retailers and banks looking to create m-commerce products and services.

Mobile payments would allow users to move their physical wallet on to their mobile phone by using technology such as near-field communications (NFC).